Will mortgage rates go up or down? Oftentimes, experts can guess fairly accurately whether rates will be higher or lower in three months. This year, no one has been right.
As 2010 dawned, the Federal Reserve was buying hundreds of billions of dollars' worth of mortgage-backed securities. Those purchases stopped, as planned, at the end of April. Virtually all of the experts predicted mortgage rates would rise by about half a percentage point through May and June, and then another half-percent in the final six months of the year.
Instead of rising in May and June, mortgage rates fell to lows not seen since the 1950s. Then, rather than rebounding higher, rates remained relatively stable in July. The consensus prediction of steadily rising mortgage rates was wrong.
Why didn't the Federal Reserve's withdrawal from the mortgage market trigger an increase in rates?
"The economy hasn't rebounded, the housing numbers look very bad, unemployment remains in the double digits," says Paul Anastos, president of Mortgage Master, a lender in Walpole, Mass.
That last point is an exaggeration; unemployment was 9.5 percent in June. But it felt higher.